Summary

The Power Distribution Enhancement Investment Program (the investment program) aims to support the government's efforts in providing reliable and efficient power supply to meet its growing energy needs for inclusive development, especially in secondary cities and rural areas. Through rehabilitation and augmentation of the power distribution network throughout the country, the investment program will improve power supply reliability and efficiency, and support the improvement of operational and financial performance of the state-owned power distribution company, Azerishiq Open Joint-Stock Company (OJSC).

Procurement Documents

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The Power Distribution Enhancement Investment Program (the investment program) aims to support the government's efforts in providing reliable and efficient power supply to meet its growing energy needs for inclusive development, especially in secondary cities and rural areas. Through rehabilitation and augmentation of the power distribution network throughout the country, the investment program will improve power supply reliability and efficiency, and support the improvement of operational and financial performance of the state-owned power distribution company, Azerishiq Open Joint-Stock Company (OJSC).

Project Rationale and Linkage to Country/Regional Strategy

A multitranche financing facility (MFF) is proposed for the Investment Program, which will allow ADB to establish a stronger long-term partnership with the government meeting its development goals, support energy sector reform, improve energy policies, and strengthen governance and capacities. The Investment Program has the following key benefits: (i) support to the government in achieving its strategic development targets, (ii) introduction of modern technology and improvements in energy efficiency, (iii) support to Azerishiq OJSC to improve corporate governance and transparency, (iv) knowledge and skills transfer via the training of power utility staff to international standards in the implementation of the latest technology, and (v) improving electricity supply service quality and enhancing productivity of small- and medium-sized enterprises. The investment program will benefit 1.45 million customers, of which 60% are residential customers.

Impact

increased availability of reliable electricity supply to all domestic consumers.

Project Outcome

Description of Outcome

improved efficiency and reliability of the power distribution networks.

Safeguard Categories

Summary of Environmental and Social Aspects

No major environmental safeguards issues envisaged. Initial environmental examination (IEE) reports including an environmental management plan have been prepared.

Involuntary Resettlement

Minimal land acquisition and resettlement (LAR) or livelihood impacts may be expected for rehabilitation works requiring the construction of distribution lines and substations. A LAR framework and a due diligence report have been prepared.

Indigenous Peoples

No indigenous peoples will be affected.

Stakeholder Communication, Participation, and Consultation

During Project Design

Consultations will be undertaken with affected people with respect to involuntary land acquisition and resettlement and IEE findings will be made available to the interested parties. In addition, consultation will be undertaken with relevant stakeholders.

During Project Implementation

field investigations, surveys, and stakeholder consultations

Business Opportunities

Consulting Services

supervision consulting firm will be recruited using the quality- and cost-based selection (QCBS) method, in accordance with ADB's Guidelines on the Use of Consultants (2010, as amended from time to time) to assist the EA to implement the project.

Procurement

To ensure the project administration efficiency, governance, and integrity, the Project will be implemented through a plant design, supply, and install (turnkey) contracting approach. International consulting firms were engaged to facilitate the project preparation and implementation. The project feasibility studies and preliminary technical design were already completed. The bidding documents are under preparation and expected to be completed by the first quarter 2012. The indicative procurement methods for the main work will be international competitive bidding, in accordance with ADB's Procurement Guidelines (2010, as amended from time to time).

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